Institute for Development Studies, University of Nairobi

The paper examines the performance of seven parastatal firms including Kenya Airways, Kenya Railways, Kenya Pipeline, Kenya Power & Light, Kenatco, Kenya Posts and Telecommunications and Kenya Ports Authority. It is shown that those firms which enjoyed natural monopolies performed well financially, which allowed them to expand rapidly and avoid major operational problems. Those firms which faced more competition were more vulnerable financially, which led in turn to operating problems.